MAYIBUYE is also available in HTML format from:
http://www.anc.org.za/lists/ancpubs.html

'Government Housing Plan Built on Rock'

By Steyn Speed, in Mayibuye, Vol. 6, no. 3July 1995

Having established solid foundations, the housing ministry has begun
implementing the plan to build a million houses. Steyn Speed reports.

After months of planning and policy development, the government's housing
plan is finally being implemented. Although the housing ministry was quick
to announce its plans after last year's election, it is only recently that
houses have begun to be built.

"There is no use rushing to put up housing which won't last for even 40
years," says housing minister Sankie Mthembi Nkondo. "I usually tell
people: 'We don't want to construct our houses on sand, we want to build
them on rock'."

The ministry's approach is a deliberate one. Interviewed by Mayibuye
shortly after his appointment last year, housing director general Billy
Cobbett said the government had resisted announcing a 'quick-fix' solution
in their first weeks of office. He said they had chosen to spend their
first months in office developing measures to address the housing problem
in the long term, even if it made them unpopular.

Those months were spent developing consensus as much as they were spent
developing policy. The core of their strategy was to bring together the
private sector, government and communities to reach agreement around the
government's housing policy and secure a commitment from each of the
sectors on their individual responsibilities.

The National Housing Summit held in Botshabelo in October 1994 was the
culmination of this consultation process. It laid the basis for more
detailed planning of the housing policy. Representatives of the nine
sectors at the summit publicly pledged themselves to the accord, and
undertook to fulfil certain obligations as a sector.

The result of this work has been that the ministry has been able to make
significant progress in getting its white paper approved by cabinet, and
establishing structures, like the national and provincial housing boards,
to implement the policy.

Although the implementation phase has started, there is room for the policy
to be adjusted according to its success. "The policy is not supposed to be
rigid, it has to be flexible. There will be need to make sure that its
realistic and accessible," says Mthembi Nkondo. She says that much of her
task involves "doing the rounds" to see the effectiveness of the policy on
the ground.

The government approved around 200,000 subsidies, which were made available
from 1 June to households earning less than R3,500 a month. The subsidy
amount ranges from R5,000 to R15,000 depending on income. In addition to
individual subsidies, the government is making available project-linked and
cooperative subsidies.

The ministry is seeing these subsidies as an "incentive" to kickstart the
question of home ownership. The subsidies are being administered through
the provincial housing boards, who have to process the applications and
liaise with the applicant and the developer. The subsidies are not being
given directly to the individual applicant, but to the builder, as a way of
protecting the funds.

The subsidies form part of the government's plan to make housing affordable
to greater numbers of people, as the majority of people who need housing
can't afford it. Linked therefore to the subsidy scheme are strategies to
bring the private sector increasingly into the low income market. Through a
Record of Understanding signed with most banks, the government hopes to
make bank loans available to lower income earners. According to the
ministry's information tabloid, Home Truths, there will be 50,000 new loans
in the next year for people who can afford credit.

Mthembi Nkondo says the government will be waiting "very keenly" to see
whether the banks are meeting their obligations, and will be waiting for
feedbacks from communities: "We've agreed with the banks that we'll have a
regular review of how the whole process works, because it is the first time
that we are dealing with this kind of package."

Banks will be also be watching to see whether communities previously
'redlined' by banks will be 'normalised', and more specifically whether
loan repayments are forthcoming.

The ministry says that to attract investment and loans, communities need to
ensure that functioning non-racial, representative local authorities need
to exist and provide services. It says there needs to be an "acceptable and
rising level" of payments for housing and services; community opposition to
crime and violence; respect for the law and court orders; and a freely
operating housing market.

To protect the consumer, and to save the government, banks and home-owner
much money, the Builders' Defects Warranty Scheme has been introduced.
Builders who join the scheme promise to build properly, and take
responsibility for their work. This will provide consumers with a higher
level of security, and will ensure that houses built are able to last. It
will alleviate one of the problems which contributed in the past to
non-payment of services, rent and bonds, says Mthembi Nkondo.

The government is not satisfied that existing measures will ensure that
enough South Africans have access to affordable housing. It is therefore in
the process of finalising details for the establishment of a national
housing finance corporation, which will make financing available to the
non-traditional retail lenders. In this way, people who earn very little
income - who normally wouldn't get loans through a bank - will have access
to credit. This money will only be available to limited segments of the
market - those who most need it. It will provide an avenue for
international investors to invest in South African housing directly.

The housing finance corporation is also intended to support emerging
contractors, especially those from disadvantaged communities. Because they
don't have the capital to compete with the bigger, established companies,
methods are being developed which will make available to emerging
contractors loans at negotiable interest rates.

To ensure that unemployed and very low income earners are able to have
housing, the government is planning the establishment of housing support
centres across the country, which will provide people with all the
expertise related to housing, including how to build their own. The
ministry plans to have "one or two" centres established before the end of
the year.

Mthembi Nkondo says the people staffing these centres will not be able to
dictate to communities. "They will be getting into communities to give
assistance where needed. And if communities feel they can get on with the
job without these professionals, they are free to do so. As long as the
resources they have been given by the government will not be misused, or
will not be wasted because people didn't have the correct knowledge to
utilise the funds," she says.

Even with all these mechanisms in place, the task facing the housing
ministry - and the people as a whole - is an enormous one. There are
between seven and eight million homeless people in South Africa. It is
estimated that South Africa has a shortage of 1.3 million houses, and each
year an additional 130,000 houses will have to be built to match population
growth. Nevertheless, Sankie Mthembi Nkondo is confident about what can be
achieved. "There is a lot we can do together, as a people and as a nation,"
she says.

Solutions Sought for Non-payment

In an attempt to normalise the re-payment of home loans, a company has been
established to help people who are finding it difficult to pay their loans
regularly.

The company, Servcon Housing Solutions, will deal with individual cases of
people who have been unable to pay "because perhaps," says housing minister
Sankie Mthembi Nkondo, "they are unemployed. Some didn't pay because they
were on boycott, some are unable to pay because they are confronted by
emergencies they had not budgeted for."

There are several options available to non-paying occupants. According to
the ministry's Home Truths, if occupants can afford to pay for the house
they are in, every effort will be made to avoid repossession. The lenders
will also help people who can afford to pay in finding ways of paying for
their loans on a regular monthly basis. If people can afford to, they will
be able to buy the houses back which were repossessed earlier.

If someone can't afford the loan payments on a house, they will be offered
help to find an affordable home. People who refuse offers of help and do
not cooperate will be removed from the house with the support of the law.
This follows an agreement between government and lenders that people can't
stay in houses they're not paying for.

The ministry has hailed the initiative as a major step forward: "For the
first time there's a link between the private sector and the communities,
which we hope to maintain because we are going to need it. There is a lot
of reconstruction which needs to be tackled by both government and the
private sector."

Summit Planned For Rural Housing

The housing ministry is planning to hold a rural housing summit early in
1996 to develop mechanisms for delivery of rural housing. Housing minister
Sankie Mthembi Nkondo says she had hoped to hold the summit this year to
"tie together the research, the investigations, the experience of the
people on the ground to look towards methods and mechanisms of delivery in
the rural areas."

Developing a rural housing programme is more difficult than in urban areas,
for a number of reasons. The dispersed location of the rural population is
chief among these. It means that distances are far greater than in urban
areas, and resources far more difficult to access. The construction time on
a house in a rural area is therefore far greater than one in an urban area.

It is very expensive also to put up the infrastructure, which includes
piping for clean water, for sewage and sanitation; electrification; roads;
and other services. The unique problems of rural areas demand that the
housing ministry develop an integrated approach together with the other
ministries.

Part of the delay to date has been that housing for the rural population,
particularly farmworkers, has been administered under the ministry of
agriculture. After a decision was taken last year to transfer that
responsibility to the housing ministry, mechanisms have been sought to
transfer the allocated money from the agriculture to the housing ministry.

The lack of clarity on local authorities in rural areas is likely also to
pose a problem for the delivery of housing there. The lack of any
appropriate structures means that there is no one to relate directly to the
people on the ground, particularly around the issues of subsidies.

The ministry believes a summit would be the best way of addressing these
problems in consultation with the rural population. Mthembi Nkondo says the
delivery of rural housing is urgent, "but at least the processes are on".